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MESSAGE FROM PRESIDENT DIRECTOR
“The Company marked its 50th anniversary by maturing into an independent coal miner that has remained steadfast in any given circumstances. With solid and collaborative leadership, the Company has overcome all challenges with resilience.”
Dear Shareholders and Stakeholders,
The year 2023 marked the Company’s golden anniversary. We could not be prouder of our 50-year journey’s consistent growth trajectory. With the proper strategies and mitigation efforts, we were able to overcome challenges one after the other. Please allow us to use this opportunity to elaborate on our efforts, strategies, and policies, as well as what we accomplished in terms of operations and finances in 2023.
ECONOMIC OVERVIEW
The International Monetary Fund (IMF) predicted that the global economy would only grow by 3% in 2023, with a relatively high inflation rate of 5.8%, which is still higher than pre-pandemic levels. The IMF made this projection after learning that the global economy had not fully recovered from the effects of significant challenges such as unsettling geopolitical tensions, high inflation and interest rates, and climate change, which was worsening.
Despite the somewhat bleak economic outlook, Indonesia was among its global peers that continued to deliver positive growth. We appreciated how the country was able to grow its economy by 5.05% in 2023. Despite a slowdown from the previous year’s 5.31%, we recognize that global economic challenges have had a significant impact on the pace of national economic growth. Indonesia’s impressive accomplishments serve as further proof of its global resilience.
On the industrial front, the data released by the Ministry of Energy and Mineral Resources (ESDM) show that Indonesia’s coal production in 2023 surpassed the stated targets to reach a record high in history. Indonesians produced a total of 770.2 million tons in 2023, increasing from 685.8 million tons produced in 2022. The total production volume exceeded the 694.50 million tons target set at the beginning of the year, accounting for 110.90%.
“Despite the expanding and complex business landscape, the Company has remained steadfast in its commitment to strengthening business fundamentals through consolidated operations.”
COMPANY POLICIES AND STRATEGIES
As the main governance body that directs the Company’s business, we always ensure that the formulation and implementation of strategies are always based on thorough, comprehensive, and objective consideration. Our respective competences and lengthy experiences allow us, as members of the Board of Directors, to integrate perspectives and insights from all stakeholders to give ourselves a better understanding of current issues that need collective decisions. We must align all our policies and strategies with the Company’s vision and mission while placing its interests in priority.
The process of formulating and implementing strategies also entails continuous monitoring and evaluation of outcomes. Through internal meetings and joint sessions with the Board of Commissioners, we engage in detailed discussions and reviews of the progress and execution of
strategies. These activities enable the Company to assess the effectiveness of implemented strategies and mitigate unforeseen impacts.
Despite the expanding and complex business landscape, the Company has remained steadfast in its commitment to strengthening business fundamentals through consolidated operations. We addressed business and economic challenges through practical strategies, policies, and solutions. Our strategies include pursuing efficiency, increasing productivity, aligning subsidiaries with the Company’s strategic direction, and refining digitalization to support seamless business operations.
THE COMPANY’S PERFORMANCE IN 2023
The Company marked its 50th anniversary by maturing into an independent coal miner that has remained steadfast in any given circumstances. With solid and collaborative leadership, the Company has overcome all challenges with resilience.
From a financial perspective, the Company booked revenues of USD1,679.9 million in 2023, a decrease of 8.2% from USD1,830.1 million in 2022. The decline was also experienced in the comprehensive income for the year by 95.8%, from USD556.76 million in 2022 to USD23.2 million in 2023. In general, this performance was due to normalized coal prices.
Despite the decline, the Company cemented its position as the only large coal miner that is not saddled with so much debt. That financial strength clears the way for the Company’s rapid growth and profitable results. The Company’s improved balance sheet has also given it a better opportunity for its stock to rebound.
Operationally, the Company produced 77.8 million tons of coal in 2023, an increase from 71.9 million tons in 2022. The largest absorber of the Company’s coal was in the domestic market (Indonesia), with China and India coming next. In 2023, the Company met the Domestic Market Obligation (DMO) requirements as a form of accountability and regulatory compliance.
Currently, the Company focuses on developing its 5 existing assets, including Citra Palu Minerals (CPM), which is already producing gold, Gorontalo Minerals (GM) with gold and copper mines, Dairi Prima Mineral (DPM) for zinc and black tin prospects, Linge Mineral Resources (LMR) for gold prospects, and Suma Heksa Sinergi (SHS) for gold prospects. The Company will continue to diversify and develop initiatives to strengthen business pillars and expand its customer base.
PERFORMANCE ACHIEVEMENT AND TARGET COMPARISON
We had set a production target of 75-80 million tons in 2023, with 77.8 million tons realized. Meeting the target involved overcoming enormous challenges such as coal price fluctuations and unfavorable weather conditions. One of our concerns was the unpredictable commodity cycle that caused the price of coal to fluctuate.
Another concern was the increase in coal production by Indian coal miners that got to press coal prices in the back half. The increased production caused India, as the largest coal consumer, to cut imports, which eventually led to weaker global demand.
CHALLENGES AND MITIGATIONS
Besides the unpredictable fluctuations in coal prices, the Company also encountered a variety of other challenges, such as soaring fuel prices that had directly impacted operational costs. The recently issued regulation, effective August 1, 2023, that requires a 30% deposit of three-month export revenue also posed a challenge that needed an appropriate response.
BUSINESS PROSPECTS
In line with the Indonesian government’s goal to decarbonize, the Company will delve into the prospects of downstream projects through strategic partnerships with external parties. When selecting the right business partners, the Company considers several aspects, including technology, innovation, and green financing. Additionally, the Company will analyze the potential benefits of incentives provided by the government.
In the medium term, the Company has a downstream plan to process coal into chemicals and to diversify noncoal projects, especially in the metal sector. The Company is also studying Carbon Capture Utilization and Storage (CCUS) and Carbon Capture Storage (CCS) technologies as new trends in addressing the energy transition to achieve global Net Zero Emission (NZE) targets.
Currently, the Company has significant coal reserves in KPC and Arutmin, for which we intend to spend Rp625.55 billion in 2024. We anticipate an increase in coal prices in 2024, owing primarily to geopolitical uncertainties, which will increase demand for coal as electricity consumption rises in the winter.
The Company has obtained approval from the Ministry of Energy and Mineral Resources (ESDM) on the 2024-2026 Work Plan and Budget (RKAB) for the Special Mining Business License (IUPK) of KPC and Arutmin. We’re optimistic that we can produce 80 million tons of coal in 2024. This target is also consistent with the volume target of 775 million tons set by the Ministry of ESDM for 2024.
CORPORATE GOVERNANCE
Throughout 2023, the Company continued to implement integrated Good Corporate Governance (GCG) practices across all business lines, including subsidiaries. The Company’s GCG practice also adheres to the principles of the Indonesian General Corporate Governance Guidelines (PUGKI) issued by the National Committee on Governance Policy (KNKG), which cover ethical behavior, accountability, transparency, and sustainability.
In 2023, the Company won the award for the International Risk Management category at the CIR Risk Management Awards 2023, surpassing 9 other international companies. International Risk Management is the only category contested by non-United Kingdom companies. This award is a recognition of the Company’s excellence and achievements in risk management at the international level.
The Company consistently and carefully manages its business risks through layered and structured processes. We navigate through every potential risk and develop tangible and solution-oriented mitigation measures to protect the Company from potential negative impacts.
Moreover, the Company also successfully garnered prestigious awards at the TOP GRC Awards 2023, reaffirming the Company’s capabilities to apply governance, risk management, and compliance.
CHANGE IN BOARD OF DIRECTORS COMPOSITION
Based on the decision of the Annual General Meeting held on June 30, 2023, the Company approved the appointment of Mr. Agoes Projosasmito as Vice President Director; and Mr. Adrian Wicaksono, Mr. Phiong Phillipus Darma, Mr. Eddy Sanusi, and Mr. Himawan Setiadi as Directors.
I extend a warm welcome to the Board and also congratulate Mr. Agoes Projosasmito, Mr. Adrian Wicaksono, Mr. Phiong Phillipus Darma, Mr. Eddy Sanusi, and Mr. Himawan Setiadi. With our respective experience and competencies as members of the Board, we are committed to making optimal contributions to the Company’s growth in the future.
APPRECIATION
Please now allow us to express our heartfelt gratitude to all parties who have supported the Company throughout 2023. We would also like to extend our gratitude to all shareholders, the Board of Commissioners, subsidiaries, and employees who have contributed in their respective capacities and kept the Company’s reputation. We also thank all customers for their continued trust in the Company.
The involvement and participation of all parties play a crucial, supporting role in the Company’s business sustainability. It is our sincere hope that the Company can grow and thrive even more progressively and continue to generate positive impacts for all stakeholders.
On behalf of the Board of Directors,
Adika Nuraga Bakrie
President Director
Dear Shareholders and Stakeholders,
The year 2023 marked the Company’s golden anniversary. We could not be prouder of our 50-year journey’s consistent growth trajectory. With the proper strategies and mitigation efforts, we were able to overcome challenges one after the other. Please allow us to use this opportunity to elaborate on our efforts, strategies, and policies, as well as what we accomplished in terms of operations and finances in 2023.
ECONOMIC OVERVIEW
The International Monetary Fund (IMF) predicted that the global economy would only grow by 3% in 2023, with a relatively high inflation rate of 5.8%, which is still higher than pre-pandemic levels. The IMF made this projection after learning that the global economy had not fully recovered from the effects of significant challenges such as unsettling geopolitical tensions, high inflation and interest rates, and climate change, which was worsening.
Despite the somewhat bleak economic outlook, Indonesia was among its global peers that continued to deliver positive growth. We appreciated how the country was able to grow its economy by 5.05% in 2023. Despite a slowdown from the previous year’s 5.31%, we recognize that global economic challenges have had a significant impact on the pace of national economic growth. Indonesia’s impressive accomplishments serve as further proof of its global resilience.
On the industrial front, the data released by the Ministry of Energy and Mineral Resources (ESDM) show that Indonesia’s coal production in 2023 surpassed the stated targets to reach a record high in history. Indonesians produced a total of 770.2 million tons in 2023, increasing from 685.8 million tons produced in 2022. The total production volume exceeded the 694.50 million tons target set at the beginning of the year, accounting for 110.90%.
“Despite the expanding and complex business landscape, the Company has remained steadfast in its commitment to strengthening business fundamentals through consolidated operations.”
COMPANY POLICIES AND STRATEGIES
As the main governance body that directs the Company’s business, we always ensure that the formulation and implementation of strategies are always based on thorough, comprehensive, and objective consideration. Our respective competences and lengthy experiences allow us, as members of the Board of Directors, to integrate perspectives and insights from all stakeholders to give ourselves a better understanding of current issues that need collective decisions. We must align all our policies and strategies with the Company’s vision and mission while placing its interests in priority.
The process of formulating and implementing strategies also entails continuous monitoring and evaluation of outcomes. Through internal meetings and joint sessions with the Board of Commissioners, we engage in detailed discussions and reviews of the progress and execution of
strategies. These activities enable the Company to assess the effectiveness of implemented strategies and mitigate unforeseen impacts.
Despite the expanding and complex business landscape, the Company has remained steadfast in its commitment to strengthening business fundamentals through consolidated operations. We addressed business and economic challenges through practical strategies, policies, and solutions. Our strategies include pursuing efficiency, increasing productivity, aligning subsidiaries with the Company’s strategic direction, and refining digitalization to support seamless business operations.
THE COMPANY’S PERFORMANCE IN 2023
The Company marked its 50th anniversary by maturing into an independent coal miner that has remained steadfast in any given circumstances. With solid and collaborative leadership, the Company has overcome all challenges with resilience.
From a financial perspective, the Company booked revenues of USD1,679.9 million in 2023, a decrease of 8.2% from USD1,830.1 million in 2022. The decline was also experienced in the comprehensive income for the year by 95.8%, from USD556.76 million in 2022 to USD23.2 million in 2023. In general, this performance was due to normalized coal prices.
Despite the decline, the Company cemented its position as the only large coal miner that is not saddled with so much debt. That financial strength clears the way for the Company’s rapid growth and profitable results. The Company’s improved balance sheet has also given it a better opportunity for its stock to rebound.
Operationally, the Company produced 77.8 million tons of coal in 2023, an increase from 71.9 million tons in 2022. The largest absorber of the Company’s coal was in the domestic market (Indonesia), with China and India coming next. In 2023, the Company met the Domestic Market Obligation (DMO) requirements as a form of accountability and regulatory compliance.
Currently, the Company focuses on developing its 5 existing assets, including Citra Palu Minerals (CPM), which is already producing gold, Gorontalo Minerals (GM) with gold and copper mines, Dairi Prima Mineral (DPM) for zinc and black tin prospects, Linge Mineral Resources (LMR) for gold prospects, and Suma Heksa Sinergi (SHS) for gold prospects. The Company will continue to diversify and develop initiatives to strengthen business pillars and expand its customer base.
PERFORMANCE ACHIEVEMENT AND TARGET COMPARISON
We had set a production target of 75-80 million tons in 2023, with 77.8 million tons realized. Meeting the target involved overcoming enormous challenges such as coal price fluctuations and unfavorable weather conditions. One of our concerns was the unpredictable commodity cycle that caused the price of coal to fluctuate.
Another concern was the increase in coal production by Indian coal miners that got to press coal prices in the back half. The increased production caused India, as the largest coal consumer, to cut imports, which eventually led to weaker global demand.
CHALLENGES AND MITIGATIONS
Besides the unpredictable fluctuations in coal prices, the Company also encountered a variety of other challenges, such as soaring fuel prices that had directly impacted operational costs. The recently issued regulation, effective August 1, 2023, that requires a 30% deposit of three-month export revenue also posed a challenge that needed an appropriate response.
BUSINESS PROSPECTS
In line with the Indonesian government’s goal to decarbonize, the Company will delve into the prospects of downstream projects through strategic partnerships with external parties. When selecting the right business partners, the Company considers several aspects, including technology, innovation, and green financing. Additionally, the Company will analyze the potential benefits of incentives provided by the government.
In the medium term, the Company has a downstream plan to process coal into chemicals and to diversify noncoal projects, especially in the metal sector. The Company is also studying Carbon Capture Utilization and Storage (CCUS) and Carbon Capture Storage (CCS) technologies as new trends in addressing the energy transition to achieve global Net Zero Emission (NZE) targets.
Currently, the Company has significant coal reserves in KPC and Arutmin, for which we intend to spend Rp625.55 billion in 2024. We anticipate an increase in coal prices in 2024, owing primarily to geopolitical uncertainties, which will increase demand for coal as electricity consumption rises in the winter.
The Company has obtained approval from the Ministry of Energy and Mineral Resources (ESDM) on the 2024-2026 Work Plan and Budget (RKAB) for the Special Mining Business License (IUPK) of KPC and Arutmin. We’re optimistic that we can produce 80 million tons of coal in 2024. This target is also consistent with the volume target of 775 million tons set by the Ministry of ESDM for 2024.
CORPORATE GOVERNANCE
Throughout 2023, the Company continued to implement integrated Good Corporate Governance (GCG) practices across all business lines, including subsidiaries. The Company’s GCG practice also adheres to the principles of the Indonesian General Corporate Governance Guidelines (PUGKI) issued by the National Committee on Governance Policy (KNKG), which cover ethical behavior, accountability, transparency, and sustainability.
In 2023, the Company won the award for the International Risk Management category at the CIR Risk Management Awards 2023, surpassing 9 other international companies. International Risk Management is the only category contested by non-United Kingdom companies. This award is a recognition of the Company’s excellence and achievements in risk management at the international level.
The Company consistently and carefully manages its business risks through layered and structured processes. We navigate through every potential risk and develop tangible and solution-oriented mitigation measures to protect the Company from potential negative impacts.
Moreover, the Company also successfully garnered prestigious awards at the TOP GRC Awards 2023, reaffirming the Company’s capabilities to apply governance, risk management, and compliance.
CHANGE IN BOARD OF DIRECTORS COMPOSITION
Based on the decision of the Annual General Meeting held on June 30, 2023, the Company approved the appointment of Mr. Agoes Projosasmito as Vice President Director; and Mr. Adrian Wicaksono, Mr. Phiong Phillipus Darma, Mr. Eddy Sanusi, and Mr. Himawan Setiadi as Directors.
I extend a warm welcome to the Board and also congratulate Mr. Agoes Projosasmito, Mr. Adrian Wicaksono, Mr. Phiong Phillipus Darma, Mr. Eddy Sanusi, and Mr. Himawan Setiadi. With our respective experience and competencies as members of the Board, we are committed to making optimal contributions to the Company’s growth in the future.
APPRECIATION
Please now allow us to express our heartfelt gratitude to all parties who have supported the Company throughout 2023. We would also like to extend our gratitude to all shareholders, the Board of Commissioners, subsidiaries, and employees who have contributed in their respective capacities and kept the Company’s reputation. We also thank all customers for their continued trust in the Company.
The involvement and participation of all parties play a crucial, supporting role in the Company’s business sustainability. It is our sincere hope that the Company can grow and thrive even more progressively and continue to generate positive impacts for all stakeholders.
On behalf of the Board of Directors,
Adika Nuraga Bakrie
President Director
PT. BUMI RESOURCES Tbk.
Bakrie Tower Lt. 12
Komplek Rasuna Epicentrum
Jl. H. R. Rasuna Said
Karet Kuningan, Setiabudi
DKI Jakarta 12940
©2024 PT. BUMI RESOURCES Tbk.
